Tax info-Non immigration

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canus_immi

Volunteer Moderator
Hello Friends ,

I have few questions on state tax.

I live PA but i am working in NJ. My company is deducting the NJ tax which at higher taxrate than PA. The reason i am asking this question what tax I have to pay NJ tax or PA tax. Mu spouse is working and also living with me in PA.

Since NJ is higher tax rate than PA do i get refund back after payig the applicable PA Tax ??

Please help me

Thanks
 
When I worked in NJ (living in PA) the company deducted only PA tax since they told me that you get taxed in the state you live. Worked fine for me. You might want to check with some tax specialist.
 
Other state Tax credit

Depending on the state laws and its treaties with other states, you may be required to file your homestate return as if you earned all your income in that state and then take credit for taxes paid to other jurisdictions. In most cases, this works out in such a way that you end up paying tax to the state with higher rate.
So although you live in PA, you will most likely be required to file a non-resident return in NJ and then, in your PA return, be able to take credit for the amount on which you were taxed in NJ.
But, the primary work location as reported by your company may also be a crucial factor to determine which state gets to tax your income.
You may want to consult a good tax attorney/accountant who is strong in tax laws of these two states for more accurate assessment of your situation.
 
You need to prove that your tax home is PA. Your utility bills, apt rents and other things will prove that. This makes you a non-resident of NJ and you can get all the tax you paid to NJ back by filing a return to NJ. Also you can deduct any expenses from your gross income you incurred while visiting NJ for work purpose that your employer did not pay. These items include any apt rent, hotel rent or food or transportation.
 
frantic is right. I do the same. I live in NJ but work in NY. So, I get my refund of all paid Tax of NY once I file return for NY state. And I have to pay NJ tax as applicable. It works fine with us. I've never deducted any transportation or other job expenses.
 
Tax is always paid where you are staying. In your case it is PA .Just file Non- resident returns NJ. You will get some credit there put that credit into PA returns. In tri-state area this common. I think your address on pay slip should be sufficient to prove that you are staying at PA address. You do not need to add any proof. My friend did it last year for him and this year for his wife. In his case he was staying NY and his employer was cutting tax at NJ rate.
 
Just wanted to add, that I never filed any NJ State Tax return during my entire tenure in that company. From what I understand, NJ has a treaty with PA so that PA taxes will be withheld at source from your pay and you need file only the PA State Tax return. You might want to check on that. It will save you the hassle of filing both NJ and PA returns. Like I said, this was what I was told by the company payroll folks and never had any issues with it.
 
PA has tax treaties with some of the neighbouring states, the so-called MINVOW: Michigan, Indiana, NJ, Vermont, Ohio and Wioming. Note: NY and DE are not in the list! This treaty covers only the earned income, your salary in your case, if it is earned in one of these states. According to this treaty, your non PA employer can pay state and local taxes directly to PA and your locality. You just have to notify your HR and/or Finance departments to handle your PA and local taxes according to this treaty.

On the other hand, small employers prefer not to handle multiple-state taxation, so they just deduct NJ tax from you. In this case you have to file NJ non-resident tax return and claim all your withheld taxes back, and file PA resident return to pay all your PA taxes.
 
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